End of Day Update-Bounce to carry on?

One thing I keep thinking about as one of the defining characteristics of it was seen last week was the week of the NFP print that would have normally sunk the market, but instead it rallied, I think there's a very strong case to be made (whether there was a leak or not), that the Friday NFP rally was set up in advance and was going to rally whether it was a QE friendly or unfriendly print as it happened to be.

The reason I believe this was documented days BEFORE the NFP in my comments that it looked like the invisible hand had spent 4-days trying to halt the decline in one of the market arbitrage assets, HYG which needs to go up to support the market and spent the 3 days prior to the NFP holding back VXX which needs to go down for the arbitrage to help the market. This was set in advance, we saw the same thing last week and this week, so dare I say that the initial knee jerk reaction that they want to appear tomorrow on the F_O_M_C is a positive one like the NFP, no matter what the outcome is (or perhaps there was and is a leak).

In Index futures, the 15 min charts still look ok as if they could support this bounce we first saw signs of last week, the VIX futures on the other hand look worse than ever on multiple timeframes and as you know VXX comes right from the VIX futures and it is an arbitrage asset that needs to drop for this to work.

Today we saw the negative divergences in VXX and there's outperformance on a relative basis of HYG today, VXX went negative intraday very clearly at 11 a.m., guess what else happened at 11 a.m., the SPY arbitrage was in effect and working with a +.30 bias.

Sentiment indicators are kind of lost and adrift like they were yesterday.

Not only in 3C, but in actual relative terms, VXX started out the day outperforming the SPX, at 11 a.m. it crossed and started underperforming, the same time as the 3C divergences in VXX and VIX futures, all a little too coincidental for me.

Yields fell today, that means the market doesn't have the same magnetic pull to the upside, but for full reversion to the mean assuming yields stay where they are, the SPX would have to hit $1800 for reversion to the mean which is what we look for with the indicator, otherwise it's starting a negative divegrence, but needs the market to move up to create it.

HY credit is drifting too as if it doesn't know what to do.

The Most Shorted Russell 3000 Stocks are outperforming today in a squeeze of sorts so there's some effort to make this bounce work.

3C's signals for support of HYG are not good, they are there by a thread, but as long as it has better relative performance than VXX, the arbitrage works.

I'd say they will continue to try to get this bounce to work, maybe it is specifically set up to work tomorrow whether ther's good or bad news on QE, maybe there's a leak, I doubt it though, it's all about perception and a positive knee jerk reaction to a negative F_O_M_C is useful for a short time.

There's VERY clear demarkation between 5 min positives and 10-15 min negatives, I'd say as soon as this bounce completes, the negatives will overwhelm again.